Core trust holding Biogen hit by withdrawal of MS drug
Core trust holding Biogen is seeing its stock come under further pressure as a result of a decision, announced today with its partner Abbvie, to withdraw for safety reasons the recently-launched multiple sclerosis (MS) treatment Zinbryta. The drug was launched in 2016 for third-line use in MS with a black box warning for liver toxicity and, although sales to date have been modest, these were nevertheless previously expected to peak at c$500m in the mid 2020s.
Ironically, the immediate effect of the decision has been muted by virtue of Biogen, as a major player in MS, being the unexpected beneficiary of a major delay to Celgene’s contender in this marker, ozanimod. Earlier this week, Celgene revealed it had received a refusal-to file letter from the FDA after submitting its regulatory application for ozanimod, something which is highly unusual. Biogen has four other approved MS products: Tecfidera, Tysabri, Avonex and Plegridy, which sell in aggregate ~$8bn/year and sales of these products had been expected to come under pressure from ozanimod together with other competitive changes in the market.
Biogen’s stock has fallen by around 9% this year, largely as a result of growing concern over prospects for its Phase III aducanumab programme for Alzheimer’s Disease, following a decision to add extra patients to pivotal trials. Biogen remains the leading player in the development of products for Alzheimer’s.
A number of the pure biotech sector specialist trusts hold substantial holdings in the company. Biotech Growth Trust (BIOG) has the largest over-weight position, with a shareholding accounting for 13.2% of its NAV. Biogen is also a top holding for two US closed end funds, Tekla Life Science (HQL) (8.2%) and Tekla Healthcare Investors (HQH) (8.2%). At 6.5% of its NAV, International Biotech Trust (IBT) has an modest underweight position, given Biogen has a 7.7% weighting in the Nasdaq Biotech Index.
Core trust holding Biogen hit by withdrawal of MS drug